5 Things To Know To Start Your Credit Union Day

November 28, 2018 at 9:17 am Leave a comment

Regulators Provide Update On Examination Process Review

This sounds like the same old song just a different tune. Yesterday the FFIEC, the group representing federal and state bank regulators including the NCUA provided an update on its  “Examination Modernization Project.” In yesterday’s update,  it emphasized the need to tailor examinations plans and procedure based on risk. Most importantly the examiners committed to issuing guidance clarifying the following principles:

  • Consider the unique risk profile, complexity, and business model of the institution when developing an examination plan.
  • Analyze existing information such as Call Report data, publicly available information, and confidential supervisory information to help identify areas of higher and lower risk when planning examinations.
  • Monitor financial institutions between examinations.
  • Tailor the document request list based on the financial institution’s business model, complexity, risk profile and planned scope of review.
  • Apply examination procedures in a way that reduces the level of review of low risk institutions or low risk areas.
  • Discuss financial conditions, risk profiles, new or expanded business lines, and pertinent new supervisory or regulatory information with institution management prior to finalizing the scope of review.

Now we will have to see if this commitment results in tangible benefits to credit unions or just is more regulatory and bureaucratic gobbledygook. I’m not holding my breath.

Fed Signals More Rate Uncertainty Ahead

Several important speeches are being made by fed officials this week and next and it seems as if the one theme in the presentation so far is that expect less certainty about the Federal Reserve’s actions on interest rates next year. This may not seem like a big deal but remember we went through the better part of a decade without any interest rate hikes followed by three well publicized rate hikes, with another one coming in December. But now we are entering an extremely tricky period where it’s not clear if the economy is too strong, on the verge of a slow-down, or somewhere in between. As a result, don’t expect the Fed to signal its intentions as clearly as it has done in the last few years.

In his speech yesterday, the Fed Vice Chairman, Richard H. Clarida  explained that with the increasing number of uncertainties the Fed will become more dependent on the latest data, “I believe we should continue to update our estimates of them as new data arrive.”

NCUA Update Arrives

Every time I mention news like this I think of Steve Martin running down the street in excitement after finding out his name is in the phone book. It may not be the most exciting thing in the world but I wanted to give you a head’s up that the latest issue of NCUA’s Online Newsletter is now available. I personally will be taking a look at its explanation of the use of narratives for credit unions applying for community charter expansions.

Congratulations Stewart-Cousins

Andrea Stewart-Cousins is on the verge of completing a political assent that started with a hard-fought victory over a prominent republican Senator, Nick Spano, in 2006 and will end with her becoming the first female Senate Majority Leader in the New York State’s Senate history. On Monday, her conference voted to designate her as the Majority Leader when democrats return to claim leadership of the Senate. Stewart’s election is also historic for another reason. Except for brief, unstable stents, the republicans have dominated the Senate since World War II. Now with only 23 republicans left standing after the election night massacre and redistricting right around the corner, I would bet you that she is the first in a very long line of Democrat Majority Leaders.

Speaking of Senate Elections

Meanwhile, despite some bumpy moments, Mississippi Senator, Cindy Hyde-Smith held back a spirited challenge from former Congressman and former Agriculture Secretary Mike Espy to win her reelection bid. We now know that republicans will have 53 seats in the new Senate, a net increase of 2 heading into what will be one of the most contentious two years in the Senate’s history.

Entry filed under: New York State, Political, Regulatory. Tags: , , , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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